GDP resources and uses - 3rd quarter of 2013

Year-on-year decline of the GDP refined to 1.3%

The gross domestic product in the third quarter was by 1.3% lower, year-on-year (y-o-y), says the refined estimate, and compared to the previous quarter it decreased by 0.1%.

According to the refined estimate, the gross domestic product (GDP) adjusted for price effects and seasonally adjusted ^*/ decreased by 1.3%, y-o-y, in Q3 2013 and if compared quarter-on-quarter (q-o-q) the decline was 0.1%.

The preliminary estimate released on 14 November 2013 expected even a deeper decline both year-on-year (by 1.6%) and quarter-on-quarter (by 0.5%). Main reasons for the recent corrections are, firstly, that later received statistical questionnaires were included into processing instead of estimates temporarily replacing the missing data, and, secondly, the value added estimate for reporting units not covered by the survey was revised as well. The estimate is constructed using administrative data on value added tax payments and a model calculation for those who do not pay value added tax. There are no tax data for a vast majority of smaller enterprises, which pay value added tax quarterly, available at the date when the GDP preliminary estimate is determined. Payments for other enterprises are known solely for the first two months of the reference period at that time. This way insufficient information by the date established may, in exceptional cases, cause a rather important revision of the model estimates has to be carried out later.

The GDP development in Q3 2013 was, in a significant manner, affected by the number of working days higher by three days, y-o-y. The GDP unadjusted for this effect was year-on-year lower by merely 0.4%, and compared to that in Q2 2013 it grew by 0.6%.

The GDP development in the first half of 2013 was refined simultaneously with the correction of the estimate for Q3 2013. According to updated calculations the GDP fell by 2.4% in Q1 2013 compared to the same period of 2012 (estimate of 30 September 2013 indicated a drop by 2.3%) and in Q2 2013 it decreased by 1.5% (estimate indicated a drop by 1.3% only). The total GDP for the nine months of 2013 was by 1.8% lower, y-o-y.

The level as well as trend in the GDP development in the Czech Republic economy are determined by changes in total demand. Its negative trend was in the last quarter affected, besides still declining investment activities, also by a drop in the positive balance of external trade. Thus only final consumption expenditure remained the only macroeconomic aggregate stimulating growth.

Demand components

The final consumption expenditure increased by 0.7%, y-o-y, namely due to consumption of general government institutions, which was by 2.6% higher compared year-on-year. In households, final consumption expenditure in total stagnated and compared to that in Q2 2013 decreased by 0.7%. Compared to the previous year, consumers preferred purchases of semi-durable and durable goods, being concrete transport means, telecommunication equipment, and audio and video equipment, to expenditure for non-durables and services.

The total capital formation decreased by mere 1.7%, y-o-y, when the relatively insignificant decrease was a consequence of unusually high growth of inventories, which grew by over CZK 15 billion (seasonally unadjusted current prices) in the quarter. On the contrary, fixed capital formation was by 5.6% lower, y-o-y and by 0.6% lower, q-o-q. All main types of size-important investment expenditure contributed to the decrease, especially buildings and structures.

The development of the external trade was adverse, also in terms of its contribution to the formation of the total demand. While imports of goods and services grew by 1.8%, y-o-y, exports, conversely, decreased by 0.2%. Thus the positive balance at current prices decreased to CZK 54.8 billion in Q3 2013.

Structure of the supply

The total gross value added (GVA) decreased both year-on-year (by 1.2%) and quarter-on-quarter (by 0.7%). The economic activities, which mostly contributed to the drop, were construction, mining and quarrying, energy, wholesale, transportation, and certain activities of services (real estate activities, information and communication, and professional, scientific and technical activities). Agriculture, forestry and fishing also did not reach the last year level because their inputs were growing faster than their productions. Financial and insurance activities formed an exemption creating by 12.1% GDP more than a year ago, although one of its components, insurance activities, did not attain the previous year level. Certain activities of manufacturing, namely manufacture of motor vehicles, other activities of manufacture of machinery and of fabricated metal products and manufacture of rubber and plastic products, also prospered. Manufacturing as a whole formed the GDP roughly at the level of the previous quarter, yet it decreased by 0.9%, y-o-y.

Employment

In the Czech Republic, viewed in the national accounts approach, in Q3 2013 there were, on average, 5 119 thousand persons employed, which was by 0.7% more than in the previous year and, however, by 0.4% less than in Q2 2013.
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^*/ Unless otherwise stated, all data presented in this news release are adjusted for price, seasonal, and calendar effects.


Contact person: Jan Heller, Director of the Quarterly National Accounts Department, phone number (+420) 274 052 865, e-mail: jan.heller@czso.cz
Used data sources updated as at: 29 November 2013
Related CZSO web page: /csu/czso/hdp_ts
Next Release will be published on: 9 January 2013 (Quarterly national accounts for the third quarter of 2013)

Published: 04.12.2013
The data are valid as of the release date of the publication.